Asia PS prices fall from early April as poor demand persists

24 April 2013 09:15  [Source: ICIS news]

SINGAPORE (ICIS)--Asia polystyrene (PS) prices have fallen from early April as persistently weak demand weighed on sentiment, market players said on Wednesday.

Despite relatively firm feedstock styrene monomer (SM) prices at the high-$1,600s/tonne (€1,232/tonne) CFR (cost & freight) China, PS values came under downward pressure from aggressive sales by traders.

“Some traders have high stocks of resins and are aggressively selling to reduce inventories,” said a PS producer in China.

Spot prices of general purpose PS (GPPS) have declined to the mid-to-high $1,700s/tonne CFR China and Hong Kong, from the low $1,800s/tonne CFR China and Hong Kong in early April.

Prices of high impact PS (HIPS) have slipped to the mid-$1,800s/tonne CFR China and Hong Kong, from the low-$1,900s/tonne CFR China and Hong Kong in early April.

“HIPS prices are under pressure also from weak acrylonitrile-butadiene-styrene (ABS) values,”  said a trader in Hong Kong.

ABS prices have dipped to the low-$1,800s/tonne CFR NE Asia, falling below HIPS prices for the first time in over a decade. Weak demand from the US and eurozone for appliances and consumer electronics made in Asia has curbed consumption of ABS.

“With ABS on the decline, HIPS prices will inevitably suffer,” said another trader in Hong Kong.

HIPS is used in the consumer electronics sector. Users of HIPS can switch to ABS as the latter offers higher impact resistance, especially now when ABS prices are lower than HIPS prices.

“While end-user contracts for PS usually runs for a year, if ABS remains so cheap relative to HIPS, users will likely switch to or seriously consider ABS next year,” said a PS producer in southeast Asia. 

While PS prices are under downward pressure, suppliers are trying to prevent prices from falling sharply as margins are growing thin.

The price spread between GPPS and SM have shrunk to $100/tonne or lower, compared to the $150/tonne spread most suppliers hope to achieve.

Meanwhile, the price spread between HIPS and GPPS prices have shrunk to around $100/tonne this year, compared to around $200/tonne last year.

“Ultimately, demand will determine whether PS prices and margins hold up,” said a South Korean distributor.

GPPS is usually used in packaging, disposable utensils and other consumer items.

($1 = €0.77)

By: Clive Ong
+65 6780 4359

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